The Political Economy of Two Great Wars

A century after Gallipoli, and two centuries after Waterloo, Adrian Gregory asks which war was better for Britain?

It is one of the lesser ironies of the First World War that it disrupted the developing plans for the celebration of the centenary of the Battle of Waterloo. An international committee was to have brought together the British and Germans with their former French enemies. Instead the year 1915 saw a significant reconfiguring of those alliances. The Times would note on 18th June 1915 that the soldiers of Britain and France were fighting as they had so often done before in the Low Countries, but this time as allies in a struggle against militarism. During the First World War in Britain the shadow of the previous 'Great War', that is the wars with France between 1793 and 1815, hung heavy at times, and parallels were often considered. But today these two 'world wars' are usually seen as very different, the former as a formative step in the rise of British Imperial hegemony whilst the latter is a disaster that led to the crumbling of that hegemony.

The Great War of 1793-1815 is often divided into two, the Revolutionary war up until the Peace of Amiens, and the Napoleonic war thereafter, but given the brevity of the 'peace' which seems to have been viewed by both sides more as a truce it makes more sense to ignore this division and refer instead to the 'French Wars'. The French Wars had cost the treasury some £1.6bn and had increased the national debt by £850m. The First World War cost some £10bn and added about £6.5bn to the national debt. As a proportion of national income the total cost of the French wars was higher, but not on an annualized basis. The human loss was around 320,000 `UK' service deaths (mostly from disease) in the French Wars, and around 800,000 in the First World War. The former was much lower per year but significantly higher per capita. Both of these wars as wars represented a terrible burden on the wealth and well-being of the nation.

Yet the big picture of the economic consequences of the war tends to emphasize how the French wars eliminated competition and established the United Kingdom as the world's dominant trading power, whilst the First World War is seen as having dissolved the UK's overseas assets and surrendered its industrial and financial dominance. The problem with this picture is the all too common tendency to abstract the economy from the actual well-being of much of the population.

The question of living standards remains extraordinarily complicated and difficult to unravel. The aggregate real wage data might suggest a small fall in `average' living standards for the British working class during the years 1914-1918. But there is also good reason to believe that wartime conditions of full employment led to an improvement in the living standards of the very poorest with for example a fall in infant mortality in the poorest inner city areas. The complex structures of overtime and piece rate bonuses further muddy the picture as does the net impact of separation allowances on family income and the employment of more family members. The picture for the French wars as a whole was not dissimilar in many respects; the overall picture of real wages in the period 1793 to 1815 is one of stagnation and perhaps a very slight decline. But unlike 1914-1918 unemployment and underemployment remained a problem during wartime, and the war saw some radical fluctuations connected with poor or good harvests. Historic data for the physical height of the late eighteenth- and nineteenth-century British population largely backs up this picture of stagnation. It is of course hard to separate out the pressures of war on the economy from other dramatic changes, not least of which was the rapid growth in population in this generation. The low point was probably 1810-1812 when the impact of the Orders in Council led to mass unemployment in most industrial districts. This combined with the cumulative impact of wartime inflation, the sense of military stagnation, and the disruptive effects of new technology, to produce widespread discontent which was met with brutality and intensified surveillance.


The Battle of Waterloo

The Battle of Waterloo, 18 June 1815 (Jan Willem Pieneman)

Women at work during the First World War- Munitions Production, Chilwell, Nottinghamshire, England, UK, c 1917

Women at work during the First World War- Munitions Production, Chilwell, Nottinghamshire, England, UK, c 1917


The Combination Acts of 1799 and 1800 ushered in an era of intense repression of working class organization, famously described by E.P.Thompson. Barred from collective action the emergent working class was unable to bargain collectively in the face of increased prices. By contrast the Treasury agreements and Munitions of War Act in 1915 recognized trade unions as partners in the war effort. One could argue that the contrast is more apparent than real. The implementation of leaving certificates during the First World War was perhaps an even greater constraint on working class wage bargaining power than banning trade unions had been in the earlier conflict, and there is good evidence to suggest that it was intended to be, particularly when combined with the threat of conscription. Police spies were also used in the period 1916-1918, some radicals were `exiled' and some imprisoned, and the government certainly feared the prospect of revolution; but on balance Britain was a less repressive society during the First World War than it had been a century earlier, and the domestic outcome of the war was strikingly different. This was in part because in 1917-1918 the government proved ready to appease labour. In the face of renewed industrial militancy the usual response of the government was to encourage employers to settle rapidly with strikers in order not to derail the war effort. The Representation of the People Act of 1918 saw a very significant expansion of the franchise whereas the end of the war with Napoleon saw the entrenchment of a government firmly set against any constitutional reform. The full incorporation of the working class into the political system after 1918 acted as at least some constraint on how the war would be paid for.

The Conservative political hegemony of the interwar years and the drive towards retrenchment was undoubtedly a reaction to a perception of middle class impoverishment and overweening Trade Union power in the immediate aftermath of the war. The 1926 General Strike was understood at the time as a crushing defeat for the working class. But there were limits. The maintenance of rent control which had been introduced in 1915, and the extension of various aspects of social welfare transfer, marked a rather different world from the Edwardian period. Even the most doctrinaire Conservatives recognised that in dealing with an enfranchised working class some compromise would be required. Even at the height of the post war depression the levels of absolute poverty did not touch the depths of misery that had been widespread before the war.

In 1925 Bowley and Hogg revisited five towns that they had surveyed in the immediate pre-war period asking the question 'Has Poverty diminished?' Using a substantial sample of some 4,000 households they concluded that in four out of five: Northampton, Warrington, Reading and Bolton, the answer was a clear yes, and only the coal mining town of Stanley in Durham had seen some movement the other way. The proportion living in primary poverty, with income below that needed to cover basic needs had fallen from 11% to 6%. A fall in family size had contributed to this, but the largest reason was a slight but significant rise in average real wages. Pensions, including war pensions, had also played a role, and it is perhaps surprising in view of the human loss of war that the number of families reduced to poverty by the loss of income of the male breadwinner had actually diminished. Such findings continued throughout the interwar period. Ten years later in 1936, Rowntree's new survey of York confirmed this decline in primary poverty.

The decisions taken in the immediate aftermath of the French wars have traditionally been understood as deeply reactionary, and that understanding is undoubtedly correct. The decision to scrap income tax whilst imposing a Corn Law was understood as blatant class legislation. The widespread analysis of 'Old Corruption' whereby political power utilized taxation to redistribute wealth from the poor to the upper class holders of pensions (pensions in this era were largely a prerogative of the higher social classes) and bonds had a good deal of evidence to support it. Among the `profiteers' (a usage apparently coined during this war) was David Ricardo who had made a fortune as a loan broker.

A contemporary description of the state of the nation in 1822 argued that `the whole range of history furnishes no example of distress and misery so extensive and severe as that experienced by the people of the United Kingdom from the period 1816 to 1822'.

The suspension of Habeas Corpus in 1817, the Seditious Meetings Acts of the same year, and the Six Acts of 1819, all maintained the wartime sense of emergency and repression well in to the peace. Whilst some of the worst aspects of the wartime and post war system of repression began to be lifted in the second half of the 1820s, a political system designed to constrain and control the working class lasted for decades. This had real consequences.

Real wages continued to fluctuate below the level of 1793 until the 1830s and did not see a sustained improvement until the 1850s. It took the best part of a generation for the growth of the British economy to be reflected in increased prosperity for the working class. This was connected to a significant rethinking of the political economy in the 1840s with reductions in consumption taxes and the re-imposition of Income Tax.

The ultimate paradox then is that the era of the French wars might be seen as good for the British economy as a whole in its global dimensions, establishing a genuine dominance of global trade, but was not good for the majority of British people. Conversely the First World War is seen as deeply damaging to Britain's overall economic health but was far more neutral and perhaps even modestly indirectly beneficial for many of the working class. Of course the rather modest processes of democratization that the First World War seems to have accelerated might have happened anyway, but the example of the Second World War should make us hesitate before completely dismissing the linkage.


Pembroke College

The Last Great War British Society and the First World War by Adrian Gregory was published by Cambridge University Press in 2008